Why two influential tech tycoons have fallen in love with a startup called Turbonomic

Tech veteran Bill Veghte, who’s held executive positions at Microsoft and HP and been the CEO of SurveyMonkey, just emerged from his nearly year-long hiatus to announce his full-time job as executive chairman of a startup called Turbonomic.

This was surprising news for a bunch of reasons. For one, it’s fairly unusual for a startup to hire an executive director from outside the company as a full-time job unless it’s part of a bigger management shakeup. For another, Turbonomic has already had a couple of big management shakeups and its ship appears to be sailing well now.

Turbonomic turns the $5 billion network management market on its head. It uses a “supply and demand” model to automatically match an app with the exact amount of computing and storage capacity it needs, changing that capacity as the app’s needs grow or shrink, with no human intervention needed.

That’s backwards from how this process typically works, where IT folks sort of guess at how much capacity an app needs, then use performance monitoring software to warn them when they need to tweak things.

The company has had a number of management shaekups. Back in 2013, boardmember and VC investor Ben Nye took over as CEO on an interim basis. Then he stayed on permanently and tells us he has no intention of leaving now.

Since Nye took over, Turbonomic has been on a tear, Nye said. It’s grown from

Until about four months ago, Nye was both its CEO and a managing partner at Bain Capital Ventures. He’s still at Bain as a VC but no longer managing the enterprise software investment practice that he founded. In terms of salary and pay, this was an expensive move, he jokes.

“I had to go back to partners at Bain and say, hey listen, I think this is big idea and I think I need to go do this. They were quite gracious. It was expensive economically. If anyone is paying to go to work, believe me, I am,” he jokes.

Digging in

But he wanted to dig in to the startup for two reasons. First, he felt an obligation to the people he hired as interim CEO, many who came to work with Nye directly. Nye is a five-times Forbes Midas List VC who’s backed successful companies like LinkedIn, DocuSign, SolarWinds, and Rapid7.

The second is the same reason that he convinced Veghte to join. They are both blown away by the technology created by founders Shmuel Kliger and Yuri Rabover.

“When someone takes a space you know well and all of the sudden they twist it and show it to you a new way, a little dopamine goes off in your head and you think, oh my god, this is going to be huge,” Nye said.

“But these guys don’t know much about the financial side, or marketing side, and then you say, OK, I can help them with this.”

He believes Turbonomic is solving a real and urgent need that can help companies save significant money. “The average data center is more than 50% over-provisioned,” says, meaning that companies buy and run far more computers and storage than they really need just to make sure their apps work well.

For instance, one of the company’s biggest clients now uses 775 terabytes fewer of memory and 2500 terabytes fewer of storage in just in two data centres, just by automatically right-sizing its apps, Nye says.

Turbonomic also works on clouds like Amazon Web Services and Google.

In fact, this kind of automation is the big selling point for Google’s App Engine cloud. And Google’s automation tech came from a startup called Stackdrivers, a company Nye backed and sold to Google.

Looking his children in the eye

As for Veghte joining the company, that’s another signal that Turbonomic is one to watch.

Veghte has been in the tech industry for three decades, cutting his teeth during the early years at Microsoft building products like Windows and Office. Then he ran HP’s enterprise business and, as its COO, helped mastermind its split into two companies. He was also briefly CEO at SurveyMonkey, replacing one his friend Dave Goldberg after Goldberg’s tragic death.

But he quit the CEO job and went back to the SurveyMonkey board early this year, citing a difference of opinion on strategy.

He’s spent the last few months travelling the world and checking out everything from startups to VC roles, he told Business Insider, and could have gone anywhere.

But, unlike his short-lived CEO role at SurveyMonkey, which was competing in an unfamiliar market, Turbonomic’s tech is 100% in Veghte’s wheelhouse. And Nye lobbied hard to get him to join.

While at Microsoft, he helped to create System Center, the monitoring software that Turbonomic now competes with. Veghte says that this type of old-fashioned software created “a freakin’ hairball”
out of today’s data centres. Turbonomic not only fixes, but can help save the planet by allowing companies to use less data center equipment — meaning less energy.

After taking time off, he realised he can’t fix all the world’s problems, but he loves technology and knows how to do build it.

“I can make the world a better place by building great technologies that use a lot less carbon emissions, so I can look my children in they eye,” he says.